Utility to close 800-megawatt coal plant in Ky.

LOUISVILLE, Ky. (AP) -- A utility company is planning to shut down an 800-megawatt coal-fired power plant in eastern Kentucky that was once slated for nearly $1 billion in environmental upgrades.

Kentucky Power announced Wednesday it would retire Big Sandy Power Plant's Unit 2 near Louisa in 2015.

The utility, a subsidiary of American Electric Power, withdrew a plan in May to spend $940 million to add a scrubber that would produce cleaner emissions at the plant and comply with federal air regulations. Customers were told the upgrades would raise their monthly electric bills by an average of $31.

Kentucky Power said Wednesday it would instead draw about 780 megawatts of power for the region from the Mitchell Generating Station in Moundsville, W.Va. Kentucky Power said the new plan would cost the average ratepayer about $6 more a month.

Kentucky Power President Greg Pauley said in a statement Wednesday that the plan would "save our customers millions of dollars while bringing us into environmental compliance."

Environmentalists applauded the decision Wednesday to close the plant. National groups such as EarthJustice and The Sierra Club opposed the utility's plans to install the expensive scrubber at the Big Sandy Plant, arguing that there were cheaper options for generating electricity.

"What all of the economics is showing is that spending hundreds of millions of dollars on aging coal plants is not reasonable and not in the best interest of ratepayers," said Shannon Fisk, an environmental attorney who works for EarthJustice in Philadelphia.

Fisk said the best option is to retire the older coal plants and replace them with cleaner energy sources.

Both generating units at Big Sandy opened in the 1960s and the facility employs about 120 people, said Ronn Robinson, a spokesman for Kentucky Power. The plants get their coal from mines in central Appalachia, including eastern Kentucky, he said.

Big Sandy's Unit 1, a 278-megawatt facility, is also scheduled to stop burning coal in 2015. Robinson said the utility has not yet decided on the future of that unit, including whether it would be converted to burn natural gas. Big Sandy employees would have a chance at other opportunities or be given a severance package if they stay at the plant until 2015, he said.

The West Virginia plant is owned by another American Electric Power subsidiary, AEP Ohio. In a plan filed with the Kentucky Public Service Commission this week, 50 percent ownership of the Mitchell plant would be transferred to Kentucky Power. The transfer plan must be approved by the Public Service Commission.

Kentucky Power has 173,000 customers in 20 eastern Kentucky counties.

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